Careem disrupts aggregator industry with radical 0% commission model

Delivery becomes more profitable for local restaurants

  
  • Careem’s disruptive new model replaces traditional high-percentage aggregator commissions with a 0% commission
  • Merchants signing up with Careem’s new model will have access to integrated payments, high-quality customer care and marketing
  • New model to make the ecosystem more sustainable in the long term, delivery more widely available and will give merchants more revenue and control

Dubai, UAE:  On the same day Noon announced a reduced commission offer for restaurants, Careem publicly revealed a new, disruptive food delivery business model it has quietly been working with restaurants to implement since late last year. The new model is set to revolutionize Careem's relationship with over ten thousand restaurants.

Commenting on the new model, Careem CEO and Co-Founder Mudassir Sheikha said, “The traditional commission model in food delivery has become unsustainable for restaurants, especially as deliveries have become a large percentage of their business. At Careem, we have always been passionate about creating opportunities for Captains and small businesses. As such, we are launching a new business model that can help restaurants thrive in this new environment while being sustainable for us. We believe the new model gives restaurants of all sizes fair and transparent pricing to profitably grow while offering customers a more responsible choice. “

Careem’s new fixed monthly charge to restaurant partners replaces the percentage-based commission that food aggregator apps conventionally charge. Restaurants have become increasingly vocal about the negative impact high commissions are having on their business as some apps in the industry now take 30% or even 35% of each order’s value. Careem designed its new model to support businesses of all sizes, especially the smaller UAE-founded and based local eateries. The new bundle model creates a lower barrier to Careem’s Super App and leaves the merchant with more revenue and control.

Careem’s UAE GM Victor Kiriakos-Saad added more saying, “We share Mohamed Alabbar’s concern for restaurants in our region. We’re now offering restaurants zero percent commissions. What Careem provides restaurants; discoverability, delivery, payment and care, doesn’t change whether an order is 50AED or 500AED. With our new model, Careem will accept what’s fair for our services so restaurants ultimately make more.”

Careem’s new zero-commission partnership model maintains all the benefits of an aggregator while allowing merchants to keep more revenue and scale their business in partnership with the aggregator. The new model replaces the traditional commission structure with three easy parts: First is a fixed monthly fee, second, a fee for the processing of all digital payments and third the actual cost of delivery minus what the customer has already paid, is charged to the restaurant. For small-value orders, restaurants will keep about 5% more of the value, while for larger orders the difference grows dramatically with restaurants keeping over 17% more by switching to Careem’s new model. Depending on the size of the business and the volume of orders the merchant can choose from 4 bundles that suit their business needs. That way the partner pays a fixed monthly fee that doesn’t change with the increment of orders, giving restaurants more control and the ability to do better financial planning.

All of this is made possible by the Super App strategy Careem announced last year. Benefits included in a restaurant’s bundle are discoverability by millions of Careem users, data analytics and insights, marketing support, customized to the merchant’s preferences, the utilisation of Careem’s payment system, customer support through the Careem CARE call centre, and website technology integration.

-Ends-

About Careem

Careem is the everyday Super App for the greater Middle East region. A pioneer of the region’s ride-hailing economy, Careem provides a host of daily services that people need to move around, order things, and transfer money in one unified smartphone app. Careem’s mission is to simplify and improve the lives of people and build an awesome organization that inspires. Established in July 2012, Careem operates in over 100 cities across 13 countries and has created more than one million income-generating opportunities in the region. Careem became a wholly-owned subsidiary of Uber Technologies, Inc. in January 2020. www.careem.com 

For all media inquiries contact:
Bianca Riley | Sophie Cooke | Nour Chaoui | Suha Sabith
Atteline
E-mail: careem@atteline.com 

Send us your press releases to pressrelease.zawya@refinitiv.com

© Press Release 2021

Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.

The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.

To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.


More From Press Releases